SEBI’s recent measures to curb speculative trading in the futures and options (F&O) market aim to enhance market stability but may significantly affect retail investors, brokers, and stock market dynamics. Key changes include limiting weekly expiries to one per exchange and raising the minimum contract size to ₹15 lakh from ₹5-10 lakh, which is expected to reduce high-risk retail participation. These moves could deter small investors who have been increasingly active in the F&O segment, leading to lower trading volumes
Source:- bbc news
For brokers, the changes could result in a 20% reduction in revenue as transaction volumes drop. The increase in contract size and the restrictions on weekly expiries may lead to reduced activity, hitting top-line and bottom-line growth. Stock exchanges might also see a dip in trading activity, given the growing dominance of retail traders in F&O markets
Source:- news 18
Retail investors, particularly those with smaller portfolios, could find it challenging to meet the higher contract sizes, potentially limiting their access to these trades. Additionally, SEBI’s phased approach and increased monitoring are designed to mitigate the risk of speculative losses, particularly for inexperienced traders
In summary, while these measures aim to reduce speculative trading and enhance investor protection, they could cool down market volumes and impact the revenue streams of brokers, with retail investors bearing the brunt of these restrictions.
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